Wall Street Hedges Against Big Tech as CDS Activity Hits Record

Wall Street is buying insurance against Big Tech. Credit default swaps tied to Alphabet, Amazon, Meta, Microsoft, and Oracle have surged 90% since September 2025, with weekly volumes hitting roughly $8 billion in December-the highest ever.

The trigger? A massive AI debt binge. The five hyperscalers collectively issued about $121 billion in new debt last year to fund AI infrastructure and data centers. Now, traders are questioning whether those investments will pay off.

Oracle is the focal point. CDS activity more than tripled in 2025, with protection costs at multi-year highs. Meta also drew increased hedging interest as its capital spending soared.

JPMorgan Chase launched a synthetic CDS basket covering all five companies, letting investors hedge AI debt risk across the entire cohort at once.

The message is clear: Wall Street is moving from AI euphoria to credit caution. Rising credit spreads will make future borrowing more expensive. For crypto markets, tighter financial conditions could reduce risk appetite.